new classical recording business model?

Bill Stensrud, who writes the blog “Business of Classical Music”, has written a very cogent and convincing argument for the abandonment of the way that classical music has been recorded and marketed since the beginning of the recording age.

I would highly recommend it to any and all of my musician colleagues who still regard recording as anything but a purely marketing and prestige tool (i.e., they see it as something which must continue to be monetized in order to make sense for musicians).

He describes the monetized model like this:

There is a lot of denial in the classical music world. Performers still believe that a CD represents a badge of honor. They can’t let go of the obsolete recording business model. They cling to the fantasy that there is intrinsic value in recording and that they should be additionally compensated for the recording of a live event.

Stensrud describes himself thusly on his blog’s “about me” page:

I was a technology entrepreneur and investor but always had a passion for music. When I was very young I was a roadie for the Grateful Dead. I fell for a violist and that was my introduction to the classical repertoir [sic]. I now make private investments, work with InstantEncore.com and attend over 100 live classical performances each year.

I bring to your attention his affiliation with InstantEncore.com, whose business plan relies on the changes that Bill suggests.  Of course he’s writing in his own company’s interests, but I believe that this new model is also in the best interest of all musicians, not just media companies and ensemble managers.  My full disclosure is that I am a friend of Margo Tatgenhorst-Drakos, who is the CEO of InstantEncore.com and former principal cellist of the Oregon Symphony.

Here is the crux of Stensrud’s argument:

Technology has no ethics. It may be wrong to copy a recording and share it but you cannot base an industry on a presumption of moral behavior. Even if a significant number of industry participants follow the rules, a large percentage will not. The practical, social and economic difficulties of making the industry work are insurmountable when a large share of the revenue vanishes and the moral minority who play by the rules are constantly confronted by the reminder that others do not. Attempts to legislate or to litigate proper behavior have completely failed. There is no practical and/or scalable way to enforce the desired behavior. The 20th century recording industry is dead.

Here’s what he thinks the new media laws are/will be in the 21st century:

The 3 Laws of Classical Music in the 21st Century

1. Money will be made by performing, by donations and sponsorship and, in some cases, by endorsements.
2. Recorded music will have no commercial value other than promotion. It is not a tool for revenue generation – it is a tool for brand building and audience development.
3. Every download and every stream of recorded music increases the promotional value of that music and increases the brand equity of the performer and presenter. It does not cannibalize recording revenue because there is no recording revenue! It does not cannibalize ticket sales – it enhances ticket sales by enhancing the brand equity and building audience demand!

And here’s what he recommends that orchestras/presenters should do to thrive under these new rules:

• Recognize that the CD is dead. Recognize that there is no direct revenue to be made by recording. Act now!
• Be an artist/entrepreneur! The 21st century artist, performer or presenter cannot focus on the art and let someone else worry about the economics. Promote yourself tirelessly and broadly.
• Get your music recorded, put on the net and make it as widely available as possible! Stream it! Download it! Put it everywhere you can. The promotional value of recorded music will no longer rest on the prestige and promotional engine of the label. Instead the promotional value of music will lie in how broadly it is disseminated, where and by whom. Every time your music touches the public it will enhance your brand awareness and your economic value as a performer.

I’m going to chew on this overnight and present my thoughts in a somewhat more organized form (than they are in my head right this moment) on Thursday – if you’ve got immediate thoughts, by all means comment below and get the ball rolling!